It's a contest for hire scam.
Sounds like a contest for hire scam. The Internet is a new thing and people are still trying to find ways to make money, but publishers have been using this scam for a long time.
My personal experience comes from my artistic background. There are plenty of artists out there with portfolios of their artwork that qualify them to contract for hire. But, that can be expensive for the publisher to hire somebody who can't make the deadline. If you have a contest of amateurs, you may find somebody who can pull something professional off. Then, for the investment of the time to run the contest you can find somebody to do the job for less than you would pay the pro, who might screw you after taking a third of the money up front.
The problem with this is the jokes on us. We don't realize that we are giving away what little we have mastered for nothing but a promise to pay if they like our stuff. There's no contract.
It sounds like a great idea, but if you look at the professional side...you're being used.
Second City has a better model but, it's similar to a contest for hire. You take these classes and you may make some great stuff. If you do, you have your foot in the door. You do have your foot in the door and you are dealing with these people face-to-face. If you don't wow them you're just out the tuition for the classes. And you probably had a great time and met a lot of great people. It's not as messed up as the Cracked.com forum where you try your stuff for free, but basically it's a contest for hire scam. I'll try out the Second City classes one day. If you can find a Second City class in your neighborhood, try it.
Finally, to let loose my monster for free? If you have ever been afraid of somebody stealling your ideas, style, and so on...that's the place to be scared of, no joke.